 Welcome back to HPE Discover 2021, the virtual version. My name is Dave Vellante and you're watching theCUBE. As the saying goes, follow the money and with me to talk about HPE financial services and the value that I can bring to customers are two great guests, Brad Shapiro is VP and managing director of the enterprise business at HPE financial services and Paul Sheeran is managing director of worldwide channel and SMB for HPE financial services. Gents, welcome to theCUBE, come on in. Thanks, Dave, really appreciate you having us. Hi, Dave. So Brad, why don't you start us off? Give us the rundown on HPE financial services. What's the scope of your services? Should we think of you as a bank? And maybe you could talk about some of the things that you do beyond financing. Yeah, that sounds great. So look, we are so much more than banking. Our mission is to create investment capacity to help customers accelerate their transformation. And maybe you could think of us as kind of like a two-in-one partner. We're part CIO, part CFO. We kind of refer to ourselves as the CIFO, if you will. And we've got expertise in a number of different areas. Of course, we'll start with financial and yes, we offer financial services and we do an awful lot of financial solutioning. We finance, you know, in our portfolio, it's over 13 billion of assets that have been financed. So that is a core competency for us, but we're more than that. We focus also on the technology side of things and we have expertise in asset management and we deal with multiple generations of technologies and all major manufacturers as well, not just HPE, but we understand technology in all different types, all different ages of technology. And lastly, we play a pretty big role around sustainability. HPE takes a leadership position when it comes to sustainability and a lot of our capabilities around the circular economy and putting assets back into reuse play an important role in not only helping customers financially but helping them meet their sustainability goals. I want to come back and ask you more about that, but Paul, I wonder, first of all, I like the CIFO. That's a great little nomenclature. But Paul, you know, if you're a small business, you know, the CEO, this is also sometimes the CIO, sometimes the CFO, you know, a lot of hats. So maybe you could talk about the role that you guys play for SMBs and also channel partners. Channels hold different ballgame, right? They want to make margin, they want to grow their business. So maybe you could discuss some of the differences in that channel. Yeah, sure, Dave. Well, starting with the SMB customer is really a critical part of our portfolio. As you said, they cover all the roles for CIO, CFO, and their budgets can be tight. And especially given the last 18 months, you know, if you read some of the data out there, you know, the budgets are really constrained, especially for the SMBs customer. So what we try and do, and what our mission is, is what we call creating investment capacity, giving budgets a boost, bring that vitality to the SMB customer base to all our customers, but especially SMB customers to help them be able to invest in their digital transformations going forward. So crucial now that all our customers are able to continue to invest in technology and the pandemic clearly brought it home, how important having a digital capability it is. So SMB budgets are tight and what we try and do is give them that boost, give them that vitality to actually continue to advance ahead and make the right investments for the future. And then from the partners, we actually deal with four and a half thousand partners around the world. As you said, partners are there also, not only looking for financial solutions, but how we differentiate ourselves is to try and help that partner move to a digital platform. We have invested heavily in our digital tools over the last couple of years. So in terms of offering solutions, it can be literally zero touch, low touch, so the partner community can plug into our platforms. We also help them on that journey to as a service. So technology is moving to as a service. People want to consume technology as a service like they do in the rest of their lives. It's all about subscription. And partners need help to be able to move to an as a service way. Hopefully GreenLake is the answer. So we support HPE's GreenLake offering. But there's different parts along the way for partners that we look to help them. And last but not least is helping them about asset management. As Brad said, it's all about the assets and understanding how those assets are managed and helping the partners having a relevant conversation with their customers as to how best to put in an asset management strategy for their customers. So three areas that we look to differentiate ourselves, Dave. I've got a lot to talk about so I want to come back and talk about as a service as well. But Brad, I want to come back to sustainability. So is it just the right thing to do? What's the financial case? Is it good business as well? And where do you fit? Yeah, so we believe that sustainability is good for the environment obviously but it's also good for business. And when you think about what we bring to the table and those assets back into reuse. So we handle between three and four million assets a year and over 90% of those we put back into reuse with about 10% going into recycling. Putting those back into reuse, the customer that has those assets, we can monetize those assets and help accelerate transformation. So we monetize the asset and we fund that transition and that transformation. So we can really help customers get more budget than they were expecting by leveraging what they would deem to be end of life assets but we find another home for those assets. So it definitely helps customers accelerate the transformation while being good for the world, good for the environment. And that's true, Paul, for SMBs, just maybe on a smaller scale and that definitely makes sense for the channel, right? Absolutely, absolutely. Sustainability now is key. It's certainly key for our channel partners. It's moving from a nice to have to a must have. So absolutely, totally agree. Yeah, and it's almost like gain sharing. I mean, sometimes we sell used equipment on eBay. It helps fund future business or future transformation. So let's get into the transformations. Everybody talks about digital transformations. You know, coming into the pandemic, everybody talked about it but there was a lot of complacency and we've all seen the wrecking ball and the acceleration we talk about all the time. But what role does HPE financial services and do you have any specific solutions that support digital transformations? Any examples there? Maybe Brad, you could start it off. Yeah, yeah, so I'll start off and then Paul, feel free to jump in. Look, Dave, what I would say is the pandemic taught us that every company is a technology company. And where HPEFS comes in is, we're looking to provide the investment capacity which is the lifeblood of a company's digital roadmap. So if you don't have the investment capacity, there is no transformation. So when something like the pandemic comes up and you can't budget for a pandemic and revenues are down and budgets are getting squeezed, you really need a partner to help you with that. How do you uncover that investment capacity? So we've talked to lots of customers. We've also done some research and the ESG group and analysts basically found that 73% of organizations not surprisingly either delayed or canceled projects around IT transformation because of all the uncertainty. So what we're looking to do is leverage all of our capabilities in a timely fashion. Last year, we announced the idea of payment holidays and deferred payments so you could keep your transformation going and not have to pay for it for a full year. And now we look at it as we're coming out of the pandemic and what we're looking to help customers with is one, help them transition their existing infrastructure into a modernized consumption model like GreenLate. Also looking to accelerate the velocity of the transformation programs by leveraging our capabilities around asset upcycling as well as our accelerated migration program. And last, looking at our existing customers really doing some financial engineering with them so they can stretch their budgets more and expand the budget to be able to handle new projects. Yeah, I mean, Paul, I think Brad nailed it. You're right, the transformations are strategic. They had to fund VDI initiatives or endpoint security or find some cash to buy laptops to support people at home. People were pulling out their servers and sticking them in their trunk and driving to their home because they couldn't get laptops for a while. But, and so what are you seeing now, Paul, particularly in the channel? And of course, you know, again, SMBs were squeezed. Maybe they don't have the liquidity that some of these large public companies have. They, you know, a lot of people just short up their balance sheets during the pandemic. Maybe the SMB doesn't have as much advantage to do that. But what are you seeing in regard to the sort of bounce back of spending more strategic areas like transformation? Well, I think what we're seeing right now and what we're hearing is, especially for SMB customers, cash, cash is king. It's all about cash preservation. It's about making sure that you'll hear some studies where some SMB customers only have three or four months left of cash in their kitty. You don't have to keep their businesses running. So that is really top of mind now. But they have to invest. If they don't invest, they're going to be dead in the water to stay ahead of the competition. So, you know, what we're looking to do is really help those customers preserve that cash and reach in and look for different ways about how to boost their budget. There's actually nothing better than an example. You know, Brad laid it out very nicely in terms of what we can do, bringing it to life. Not so much an SMB customer, but there is UNAD. And UNAD is a university in Columbia based in Bogota. And their mission is very simple. It's all about excellence and learning. But as they went into the pandemic, they needed to invest in their distance learning platforms to really help their students. And like most businesses, you know, cash and the budget was being squeezed, revenues were tight. So it would have been very easy to postpone that investment. But what we did with UNAD and working with UNAD and their IT team was firstly to understand their existing IT estate and really see what assets are being utilized, what are not being utilized, what assets have reached their end of their useful life. And you'd be amazed and it's not just a data center. You know, we can work right across their whole estate. So as well as the data center, we look at the PCs to your point David, we look at even their print estate. And we identified many, many assets that were being underutilized and other assets that were end of life. So we're able to take those assets back and actually release value and boost UNAD's budget. And some of those assets could not be, they had no value and sustainability was top of their agenda as well. And as you'd imagine the university wanted to lead and show their students that sustainability is key. So we're able to take those assets back and actually recycle them in a very environmentally sound way. So that was the first step to actually inject some cash into their budgets. The next step then was to look at their existing financial contracts that they had in place with maybe some of their banks and actually restructure those contracts to actually give them additional capacity to invest right now in technology. And I'm delighted to say they partnered with the HPE team and with Aruba to actually continue their five year roadmap and actually improve their distance learning platforms. So I just thought that was a really good example right now in the current climate as to show when we work together with our customers, what's actually possible. So let's talk a little bit more about GreenLake. I mean, for decades, I mean, even back to the 80s, I saw financial instruments to sort of rent essentially, but it's different. GreenLake, HPE has pivoted its entire company as a service. And I want to understand better what role HPE financial services plays in making that transition. It's obviously a crucial part of the financing piece, but Brad, maybe you could tell us a little bit more there. Yeah, sure. And I think the great thing about GreenLake is it's more than just a consumption model. It's really providing that cloud experience on-prem and being able for customers to really manage a hybrid cloud experience. But where HPE FS plays a role, again, it's around our knowledge and ability around assets. So we're underneath GreenLake doing financial engineering, managing the assets. But the biggest thing, when you think about how does a customer transition? If they're in a traditional cash purchase paradigm, the cost of change and figuring out how to move into a new type of paradigm, a new consumption model can be daunting. So HPE FS works closely with our GreenLake team and the customer, and we can take those existing assets and look to accelerate the migration into a GreenLake. A great example of that, a public sector customer, Kern County, they were in that cash paradigm, they had lots of assets, like most entities, they were under pressure from a budget perspective. Tax revenues were down for a couple years in a row. So not only did moving to a GreenLake model provide some cost savings, and cost savings are important, but it also allowed them to deliver the services they needed to their constituents because they had that pay for use type of flexibility. They were able, they didn't have a long delay in procuring and provisioning equipment when they needed to roll something out. And again, once again, HPE FS was able to monetize their existing assets, roll those into a GreenLake solution and help self-fund that transformation and really accelerate it to get from that cash paradigm model to a new GreenLake consumption model. Paul, what about the channel? I mean, on the one hand, I could see the channels loving GreenLake because there's a lot of services involved and it's sort of an ongoing drip of cash as opposed to the sort of big hit. But on the other hand, it's the ongoing drip of cash as opposed to the big hit. What's the conversations like with the channel? How is that going? It clearly is the future, but how do they see it? Well, I wouldn't say drip of cash. We would call it an annuity revenue where it's very predictable, which is actually also a good thing rather than the sort of a one and a done solution. So clearly GreenLake is very important to our channel partners and we're seeing some really good adoption across the world. And again, we underpin that. The other thing to say is a lot of channel partners as you rightly say, want to sell services and become service providers. And what we also do is support not just the data center, but also workplace and print. And what you'll see on the printing side for many, many years, the print partners have been selling a contractual type of model. But a lot of partners now are moving all of their core portfolio into as a service. And there's different parts. It's sort of a, it's nearly a cash to as a service journey and there's different parts of that ladder on the way. And we all look to help our partners get along that ladder and hopefully positioning GreenLake. But there's also more simpler solutions like subscription that we can position on that journey. So it's really helping that partner get the confidence and the financial wherewithal and the infrastructure to get on the as a service journey. How about solutions? I mean, you guys have had some recent announcements. Maybe Brad, you can take us through sort of what the highlights of those were. Sure, so the first announcement was really the example I just provided, which was how do we transition customers to GreenLake? So again, that's a really important step for many customers. And something that we can help them with is moving from that existing paradigm to GreenLake. The second is really helping customers create velocity to move their transformation programs faster. And we do that in a number of ways. But again, all around the asset in our asset management expertise, whether we look to put those assets back into reuse in their facility, or if we look to monetize those assets and put them into reuse with a different customer, really it's all around how do we accelerate the customer's transformation as we come out of a pandemic. And then lastly, the offering is really focused on how can we help the customer look at existing budget and really financially engineer where they're spending their money to create new pools of budget and cash so they can fund new projects. So it's interesting, because when I look at the customers that we're doing these things with, it really spans every industry. So we're dealing with financial services and insurance companies, communications and broadcasting, travel and hospitality, you name it, manufacturing. So the interesting thing is, while sometimes you come out with solutions that are very industry specific, I think our circumstances today really span lots of industries, both in the commercial and the public sector. And we're finding that these offers are really relevant right now for customers. Let's zoom out for a bit. And Brown, let's start with you. And then Paul, I want to get your unique perspectives from the standpoint of SMB and the channel. Summarize your overall strategy in that context. And then I'm interested in, how important do you feel the HPE financial services is with regard, of course, you guys are biased, but that's okay, I want to hear your biased view. How important is it in the grand scheme of actually doing business with HPE? And I'm interested in why HPE and how much of a competitive advantage you bring relative to some of your major competitors. Yeah, sure. So, okay, the strategy, in my mind, I'll start with HPEFS, it's really making sure that we're working closely with our customers, understanding their needs from a business perspective and what business outcomes they're trying to achieve and then marrying both the financial planning and the technology planning to help those customers deliver and achieve those business outcomes. Doing that, also in a way that is sustainable and is good for the environment and helps customers achieve their sustainability initiatives. So, kind of marrying that financial technology and sustainability portion of it. From my perspective, I think HPE is a fantastic partner. One, we've been at Green Lake for quite a while and it continues to evolve. The experiences that we can provide customers now are significantly advanced from when flex capacity came out years and years and years ago. So, I really think if a customer took a look at Green Lake a few years ago, you need to keep looking at it because it really has evolved, really creates a unique experience. But I think it's the combination of our technology. We have great technology in our portfolio. We have a fantastic model in Green Lake and then we have all of the financial engineering expertise around assets and life cycles and how to get the most out of your IT investment. And we are a partner. If you have sustainability initiatives, I mean, HPE talks the talk, we walk the walk. We do all of this for ourselves and then we bring those practices out and share best practices with customers. So, I really think it's a great time to partner with HPE if you're a customer. Great, thank you for that, Brad. Paul, what would you add for your constituents? Brad said it beautifully. So, just a couple of points I'd add and from a partner perspective, we are actually in every corner of the world. So, we have that global footprint and as you see consolidation in the market, that's very important not only for our customers, but also for our partners. More and more solutions are going cross-border and involve different regions. And we look to make sure that we're globally consistent in how we work with our partners and work with our customers. And the final thing I'd say is we get very excited about supporting our HPE colleagues. But from a channel perspective, we actually also support HPI, HPE Inc. You will recall before separation that the companies did. So, we also support the workplace and print environments, plus third-party vendors, which again is important for the channel community where you need a one-stop shop and where you'll often have a mixed technology and a solution. So, we're there for that as well. And always helping. And I think the partner community love our consistency there. It's a nice arrow in your quiver. And of course, we've seen laptop demand explode. And it looks like it's gonna sustain for a while here. It's hard to predict, but Paul, stay with you. Tell us, you know, thinking about the future, what's getting you jazzed up? Well, I said we have a global footprint and every country is in a different place right now as we sort of come out of the pandemic. Some countries are still in the midst of it. But what gets me jazzed up and what gets me excited is the sense of optimism. I think we sort of figured out how to navigate our way out of this pandemic and the current environment. And customers all recognize the need to invest in technology. Technology is the way forward. So, that means having the capacity, the investment capacity, the investment vitality to make that investment. So, what gets me excited is what we do is important and we're there to help. Great, thank you. And Brad, two part question for you to bring us on. So, what are you excited about and what do you got going at Discover? Yeah, so in terms of my excitement, I think Paul said it well, every company is a technology company. And when we see the, you know, everybody's going through a digital transformation. Quite frankly, we at HPEFS are going through our own digital transformation. You know, Paul mentioned earlier about Technomics. We have omnichannel ways of engaging with us that are consistent. We're looking at our customer and partner experience and continuing to improve those. So, we're not resting on our laurels and what we've done in the past. We continue to change, to modernize, to create new and better ways of doing business with our customer base. So, the exciting part for me is that change that comes with innovation and technology. And I just think HPE is a great place to be right now with all of that innovation going on. So, you asked about Discover. So, we're really excited. We've got a spotlight with Irv Rothman, focused on investment agility and key to growth and regeneration. So, that's really exciting. We have a few breakouts making technology a force for good, you know, getting back on track to create the investment vitality to take on the world and investment strategies to accelerate innovation in a disruptive world. So, really excited about that. And then last, we've got some demos. We have a live interactive demo on our technology renewal center, as well as some on-demand demos of those renewal centers as well. So, we've got a lot going on at Discover and we're really excited about it. Great, gentlemen, thank you for that. So, I mean, look, cost of capital is low, but to have a technology partner with you that also has financial expertise, that to me is a killer combination. Guys, thanks so much for coming on theCUBE. I really appreciate your time. Dave, thanks for having us. Thanks, Dave. All right, and thank you for watching theCUBE's continuous coverage of HPE Discover 2021, the virtual edition. Keep it right there for more great content.